Corporate Social Responsibility

by Michael Patrick O'Leary

This article appeared in the December 2008 edition of LMD (Lanka Monthly Digest) with the strapline: “Cosmetic Concessions? Michael O’Leary draws attention to what he believes is hidden under the cloak that is CSR.” I have corrected some of the pusillanimous censoring edits that the editors perpetrated.


Is Corporate Social Responsibility (CSR) an idea whose time has come or is it a huge cloak woven by big business to conceal the elephant in the room? Many businesses are aware of the concept, but how do they practise it? I’ve been trawling through some Sri Lankan corporate websites and noticed that I  only come up with ‘under construction ‘when I click on the CSR page.


CSR has been defined as the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as that of the local community and society at large.


Ambrose Bierce’s Devil’s Dictionary defines a corporation as “an ingenious device for obtaining profit without individual responsibility”. The corporation is a legal construct, a charter granted by the state to a group of investors to gather private funds for a specific purpose. The concept maintains the fiction that the corporation is a person, but the practical reality is that the organism develops in such a manner that the entity cannot be held accountable for morality in the way that a human being could be.


If the corporation is a person, that person is a psychopath, according to corporate researcher Joel Bakan. “Human psychopaths are notorious for their ability to use charm as a mask to hide their dangerously self-obsessed personalities.” For corporations, social responsibility may fulfill the same function as charm. “Through it, they can present themselves as compassionate and concerned about others when, in fact, they lack the ability to care about anyone or anything but themselves.”


Corporations put into practice the concept named by the German philosopher, Herbert Marcuse, as ‘repressive tolerance’. The most effective means for governments and large organisations to keep their hold on power and to fend off revolt is not by direct confrontation but by co-opting the rebels, inviting them in, offering some cosmetic concessions and making them complicit in the enterprise.


Greenpeace and Friends of the Earth went to war with multinational corporations over their environmental depredations. Today, the corporations invite the environmentalists into the fold and seek their advice on how to clean up their act.


The number of companies reporting on their CSR activities in the UK has shot up in recent years, which at least demonstrates its growing popularity as a PR tool. Ninety-four per cent of company executives believe the development of a corporate responsibility strategy can deliver real business benefits.


A third of businesses in the UK do not pay any corporation tax, which results in a shortfall in the common purse of US$ 93 billion each year. Corporate profits in 2006 and 2007 were the highest on record. Top executives’ remuneration packages in May last year were double what they were ten years ago. The average pay for directors in Britain’s top companies rose 37 per cent in2006, whereas the salaries of workers grew by just 3.3 per cent. CEOs of large US companies make as much money in a day as an average worker makes in a year. The financial meltdown has not seriously brought these profiteers down to earth. It was good for them while it lasted and governments are now bailing out these risk-taking buccaneers.


“We do not want children to smoke,” a multinational tobacco giant declares on its website. But in Malawi, Mauritius and Nigeria, the company used marketing tactics that are well-known to appeal to youth: advertising and selling single cigarettes, and sponsoring non-age-restricted, product-branded musical entertainment.


Allan M Brandt wrote in his great book, The Cigarette Century, that for US tobacco companies, “responding to critics marked a challenge to be met rather than a moral or ethical dilemma restricting action”. More than one in five American adults still smoke regularly and tobacco kills more than 435,000 US citizens each year. The public in the West has responded to persuasion, to consider the health risks of smoking. Kenneth Clarke was Secretary of State for Health in the UK. His ministry developed and funded a number of ‘Healthy Nation’ projects. After he left office, he was paid GBP 100,000 a year by a tobacco company to peddle cigarettes in the Third World. His bid for the Conservative Party leadership was undermined because he was distracted at the time of the election by visiting Vietnam at the behest of this tobacco manufacturer.


It is projected that in the course of the 21st century, one billion people across the globe will die, probably in protracted agony, of tobacco-related diseases. Gallage Punyawardana of the Swarna Hansa Foundation says that in Sri Lanka, 27,000 people die every year from diseases brought on by the use of tobacco.


Senior marketing officers of CTC (Ceylon Tobacco Company) are claiming that their company is a ‘responsible organisation’. What this responsibility means in the real world is shrouded in management jargon about ‘business-building programmes’ and ‘value-added services’ that may very well be a case of avoiding that elephant in the room. The elephant is smelling rather rank.